"I'm much too young to feel this damned old." Garth Brooks

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Saving the 60 Blog

If you take care of your pennies, your dollars will take care of themselves.

Have you taken care of your pennies? Did you start saving for retirement many years ago? Or are you with the majority of Americans who haven’t saved enough money for their golden years?

I remember my mother telling me many years ago (I was probably 25) that I should start saving for my retirement. But why, I’d ask, it’s 40+ years from now! And now, I’m grateful that I listened to my mother (for once).

Before I share some statistics from the Economic Policy Institute (“EPI”), it’s important to recall some high school math. The “mean” is the “average” you’re used to, where you add up all the numbers and then divide by the number of numbers. The “median” is the “middle” value in the list of numbers.

According to a March 2017 report from the EPI, the mean retirement savings of all working-age families (which the EPI defines as those between 32 and 61 years old) is $95,776. But that number doesn’t tell the whole story. Since so many families have zero savings and since super-savers can pull up the average, the median savings, or those at the 50th percentile, may be a better gauge. The median for all working-age families in the U.S. is just $5,000.

Retirement preparedness varies by age. Not surprisingly, younger families have less stashed away. Here’s a breakdown of the mean and median retirement savings of U.S. families at every age:

Mean retirement savings of families between 32 and 37: $31,644

Median retirement savings of families between 32 and 37: $480

Mean retirement savings of families between 38 and 43: $67,270

Median retirement savings of families between 38 and 43: $4,200

Mean retirement savings of families between 44 and 49: $81,347

Median retirement savings of families between 44 and 49: $6,200

Mean retirement savings of families between 50 and 55: $124,831

Median retirement savings of families between 50 and 55: $8,000

Mean retirement savings of families between 56 and 61: $163,577

Median retirement savings of families between 56 and 61: $17,000

How big should your nest egg be? The answer is highly personal, and specific dollar amounts can be arbitrary, but according to retirement-plan provider Fidelity Investments, a good rule of thumb is to have ten times your final salary in savings if you want to retire by age 67.

Fidelity also suggests a timeline to use in order to get to that magic number:

By 30: Have the equivalent of your salary saved

By 40: Have three times your salary saved

By 50: Have six times your salary saved

By 60: Have eight times your salary saved

By 67: Have 10 times your salary saved

How well are you doing? Are you saving enough? Thankfully, I’m almost on track.